February 10, 2023

In recent years, the crypto asset landscape has expanded rapidly, and firms and regulators alike are struggling to keep up with the ramifications of this fast-moving industry. As leading Financial Crime Compliance (FCC) experts, Lysis Group has significant expertise in the crypto asset space and can provide insight both from a training and consulting perspective. This insight can be shared in the form of our relevant and tailored training modules or from a consulting point of view where Lysis has the expertise to guide firms through the crypto asset registration process and provide the necessary support needed once registration has been obtained.

Bespoke training modules

Lysis Group has partnered with i-KYC in the E-Learning space and designed two bespoke crypto asset training modules which offer inter alia a detailed look at relevant basic concepts, associated risks, regulations, and the evolution of the crypto market.

The first module provides a detailed overview of the basic concepts behind crypto assets including what is meant by the terms ‘cryptocurrency’ and ‘digital assets’ as well as the regulatory context in the digital and virtual asset space. This module also unpacks the various anti-money laundering challenges linked to compliance and regulation in relation to the mainstream acceptance of digital assets. In addition to exploring the journey which global regulators are going on in an attempt to understand and regulate this industry, this module expands on some of the key crypto financial crime ‘red flags’ or typologies that need to be considered in any Financial Crime Controls Framework.

Following on from Module 1 and armed with a thorough understanding of the basic building blocks linked to crypto assets, Module 2 focuses specifically on the impact that crypto assets have on the overall global financial industry. This module explains the potential that can be unlocked by crypto assets, for both firms and clients, but also highlights the various risks linked to crypto assets. This popular module further clarifies top-of-mind developments in the crypto economy including DeFi, Web3, NFT’s, the Metaverse and so much more. Last but certainly not least, this module offers in-depth insights into the possible evolution of the crypto asset economy, going forward.

A popular topic of discussion

Following the fast expansion of the crypto asset dimension, the regulations to govern this environment have also evolved exponentially. This has resulted in crypto assets and their capabilities becoming a very popular topic of discussion in boardrooms. Many of these discussions also include the regulatory requirements for crypto asset firms wanting to operate in different countries and how these regulations vary from jurisdiction to jurisdiction.

The Lysis Group has been, and continues to be, successful in assisting clients with complex and contentious regulatory aspects regarding crypto registration. We have assisted many crypto asset firms to obtain registration in various jurisdictions and are uniquely qualified to assist Crypto Asset Service Providers (CASPs) to prepare for a regulatory registration application. In addition to regulatory registration preparation, Lysis has the expertise to assist crypto asset firms to establish the financial crime framework needed to remain compliant during their operations.

Crypto Asset Service Providers (CASPs) should be wary of resting on their laurels post regulatory registration; regulators expect firms to put in place and maintain robust financial crime compliance controls frameworks evidencing how they identify, assess and manage their risk on an ongoing basis.

Early intervention is key

Lysis can assist firms in this regard by conducting health checks and maturity assessments which are the first steps in assessing a firm’s financial crime (FC) framework because it depicts the current state of a firm’s controls and the level of regulatory compliance. Furthermore, the main purpose of health checks and maturity assessments is to benchmark and test against a firm’s existing standards, global standards, where applicable, and most importantly, against regulatory expectations.

Health checks and maturity assessments can highlight the gaps and improvements needed for a firm to implement a robust financial crime framework, including early interventions and long-term interventions within which the controls environment can be improved for a firm to become and remain compliant in a cost-efficient manner. By not addressing the core problems of a FC framework, the result could be a thematic review and hefty fines as well as a reduction in efficiency and higher costs in the long run. This in turn can affect the firm’s bottom line negatively.

The checks and assessments are completed in line with the current industry regulations and best practice and are benchmarked against the firm’s business model and risk appetite. Upon completion of the health check or maturity assessment, Lysis can provide a detailed plan to advise firms on the next steps that should be taken to meet the regulatory requirements, both from a macro and micro perspective. Health checks and maturity assessments can also be tailored to meet the specific requirements of any firm, regardless of business activity and industry type.